Italy VAT rise to 24% 2017

The new Italian Stability Law of 2016 has introduced a potential VAT increase to 24% from 1 January 2017. There would be a second rise in 2018 to 25%.

The standard and reduced VAT increases would be as follows:

VAT Rate

Current

Jan 2017

Jan 2018

Standard rate

22%

24%

25%

Reduced rate

10%

13%

13%

Super reduced rate

4%

4%

4%

The imposition of the VAT rate increase will be dependant on the performance of the economy over the next twelve months. Italy had planned a similar VAT rise to 24% in 2016, but recently withdrew it based on renewed growth in the economy.

The 2017 VAT rise proposal has been put forward to reassure the European Commission of Italy’s resolve to remain within the Euro currency’s 3% deficit to GDP ratio.

VP Global Indirect Tax

Richard Asquith

VP Global Indirect TaxRichard Asquith

Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.